As the mobile land­scape rapidly evolves and cus­tomer usage of mobile con­tin­ues to accel­er­ate, suc­cess­ful com­pa­nies will lever­age mobile chan­nels to gain mar­ket share, fos­ter deeper cus­tomer rela­tion­ships, and build new sources of revenue.

Strate­gic Developments

Rapid expan­sion of mobile inter­net usage: Opera’s Sep­tem­ber State of the Mobile Web report pegs year-over-year US mobile page view and unique user growth at 309% and 123% respec­tively; Pew Inter­net reports daily mobile web users com­prise 19% of all US adults (a 73% increase in 16 months)
Emer­gence of new mobile mar­kets: rough esti­mates place the mar­ket size of Apple’s App Store at around $150 mil­lion annu­ally
Mobile mar­ket share up for grabs: while Baidu is the clear leader in China for web searches, Google’s mobile invest­ments have made com­pe­ti­tion nearly even for mobile searches in China

Oppor­tu­ni­ties

In school way back in 2000, my class reviewed a Har­vard case study which cen­tered on the impact of new inter­net bro­ker­age firms like E*TRADE on Charles Schwab. The case debated whether Schwab should chase the inter­net lead­ers or stick to its core “brick & motor” busi­ness, for­go­ing inter­net chan­nels entirely.

Some stu­dents at the time main­tained Schwab shouldn’t invest at all in inter­net channels—rather they should focus on their “high touch” posi­tion­ing since their best clients weren’t cur­rently engaged with online chan­nels. Fast-forward ten years and the class debate looks pretty archaic, until you con­sider a recent review of the top 100 inter­net brands which con­tends that only 1 in 3 brands has an effec­tive mobile web pres­ence (inci­den­tally, Schwab and E*TRADE both got it right).

schwab-etrade

While the recent review had con­sid­er­able sub­jec­tiv­ity in the way “effec­tive mobile web pres­ence” was mea­sured, my per­sonal expe­ri­ence val­i­dates that many brands are still sit­ting on the side­lines. Busi­nesses not engag­ing users in the mobile chan­nel bring us back to the old debate—“should we build a [mobile] website?”.

These busi­nesses should be warned—brand dom­i­nance in the mobile space is not a fore­gone con­clu­sion. Recent search engine mar­ket share data from China (as reported by Analysys Inter­na­tional) shows Baidu, the lead­ing search engine, has not main­tained its dom­i­nant posi­tion in mobile search. In fact, sev­eral providers with vir­tu­ally non-existent mar­ket share for stan­dard web search have cap­tured a sig­nif­i­cant pro­por­tion of the mobile search mar­ket (e.g. 3GYY).

search-engine-market-share-china

Emer­gence of com­pletely new busi­ness mod­els and mar­kets is also cre­at­ing sig­nif­i­cant busi­ness oppor­tu­nity. A case in point is the iTunes App Store. Rough esti­mates place the paid app mar­ket within the iTunes app store at $150 mil­lion annu­ally—not shabby for a mar­ket that didn’t exist 2 ½ years ago!

estimated-apple-app-store-market-size

Explo­sive growth of mobile web usage, busi­ness inno­va­tion in the mobile sec­tor, and uneven invest­ment by the dom­i­nant play­ers in the tra­di­tional web has unfrozen mar­ket share and cre­ated com­pletely new busi­ness mod­els, rev­enue streams, and growth oppor­tu­ni­ties. All of these fac­tors are rem­i­nis­cent of inter­net growth from ten years ago—is your busi­ness still par­ty­ing like it’s 1999?

Sources:

http://​www​.opera​.com/​s​m​w​/​2​0​0​9​/​09/

http://pewinternet.org/~/media//Files/Reports/2009/Wireless-Internet-Use.pdf

http://​www​.pcworld​.com/​b​u​s​i​n​e​s​s​c​e​n​t​e​r​/​a​r​t​i​c​l​e​/​1​7​1​3​71/ googlebaidu_rivalry_goes_mobile_in_china.html

http://​www​.mar​ke​tre​portchina​.com/​m​a​r​k​e​t​/​a​r​t​i​c​l​e​/​c​o​n​t​e​n​t​/​3​3​7​6​/​2​0​0​9​0​8​/​2​0​6​9​7​5​.​h​tml

Strategic Developments Impacting Optimization of Mobile Businesses

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